are trading much higher after they agreed to pay a settlement with new york regulators for doing business with i lan. we'll have more details from london. the carlyle group reportedly near a deal to buy getty images. getty, of course, is the largest supplier of stock photos, video and digital content. necessity have lots of videos of joe. the deal could be announced as early as today. the sale could come more than four years after hellman and freeman took getty private for $2.4 billion. later we're expecting quarterly results from target. the second piece of the nation's inflation picture, the consumer price index will be released at 8:30 a.m. eastern time. economists are expecting a rise of 0.2% on the headline number and the core rate. mr. kernen, yesterday --

>> thank you, andrew. >> -- yesterday you gave me a little hard time for knowing about 13 ds and it was on the calendar. >> the 13 f. >> 13 fs, yes. on my outlook clrpd. now i think you're about to talk about some of those. >> that's right. >> george soros buying facebook f i'm correct. >> i doenl know. i don't know. there's four lines i see in the teleprompter. what comes after that -- >> is anybody's guess. nobody knows. >> i read all the scripts before the show to read them really professionally. a fluttered scheduled regul regulatory, and berkshire sold stake in intel in the second quarter and disclosed new holdings in phillips 66 and national oil well. berkshire raised stakes in vie

acome, ibm and wells fargo and reduced positions in j&j, proctor and gamble, kraft, u.p.s. and ge. >> a lot of people getting out of kraft, by the way. >> they'll rule the day, he sold ge. gold getting its groove back with two big name investors. john paulson and george soros bought more of etf or gld in the second quarter. first time paulson has added to his gold position since losing in 2009. among other -- that wasn't in the script. he has -- that has been his -- not a good position for paulson. i mean, you know, future -- after that great year with -- during the financial crisis it's been tough a couple years.

gold was not one. >> gold did not work. >> do you feel like we're in the dog days -- i feel like we're in the dog days of august. >> you think we hit that? did you see the market yesterday? >> you don't tell the viewers we're in the dog days of anything. >> the viewers that are still here are die hards. >> because of -- the rest are on vacation? >> they're in the persistent -- >> there's nothing. if there's -- there's no one in europe. actually, it's weird because people just move around in europe. there's no one in europe working. the people that live in portugal have gone somewhere else -- >> they have a lot of time to watch tv. >> they're watching ross westgate and kelly evans. >> we're broadcast there. >> we do. i like to think we do watch. >> when you were am paris and europe, accosted constantly. >> constantly. they thought i was gary busse, bud y holly. among other moves george soros

sold stakes in jpmorgan, goldman sachs and citigroup and disclosed new moves in walmart. on the dow we're indicated down two point or on. you can't ignore, andrew, facts. it's august 15th and people vacation. aren't you leaving soon? >> i am. but, you know -- >> do you think you'll be recognized there? >> no. >> i hope the lions don't recognize you. >> they're not going to recognize me. >> how's your arm, where you got all the shots? >> yes. >> do not bring a warm that crawl up between your toes and entire body has an eight-foot tape worm. >> for viewers who have no idea -- >> do you know now? >> -- i'm going to africa. i needed shots and my arm was hurting because of the shots. >> that's what you said. it was your left arm.

>> george soros investing in facebook. steve cohen also in face bok. quet the question is, when did they get into facebook? >> it's an attractive thing to buy something much cheaper but you still don't know -- it's a falling knife. you don't know where in the fall the knife is. groupon -- >> we didn't talk about it now, but david einhorn got out of r.i.m. now that's a stock that's gone up. i'm assuming he lost money on that but i don't think it was a big position. facebook could be on the move this week as first lockup on sales expire for early investors. 271 million shares become eligible for sale on thursday. so, tomorrow. part of the $1.9 billion that

may be available over the next nine months. potential sellers include angel investors -- did you watch the doc last night? >> it was too late. >> elevation partners, microsoft and goldman sachs. the expectation, i should say, by the way, microsoft is not going to sell. they consider is a strategic interest. goldman sachs got in when there was a $50 impl valuation. they would have made a little money. the question is, if you hang o which way will it go? it's been a rough summer for facebook, down 37%. $20.16, coming out at $38. it went slightly higher than that and -- i don't even know what to make of all this anymore. >> did you -- you watched it at -- was it on at 9:00? did you ask them to turn it on in the french beast row where you we -- bistro?

you go out have night, don't you? >> sometimes you can ask a maitre d' to bring over a little -- >> you had dinner out last night. >> can i tell you what i did last night? >> is it okay -- >> i hung out with the kids and -- >> you didn't go out to dinner. >> i did not. >> good. you will tonight, i'm sure. >> i will be home. tonight, i'm babysitting. >> i like hearing this. you have a job starting at 6 a.m. >> i think it starts a little earlier. >> sometimes it doesn't look like it. >> i'm not missing anything out there. >> let's talk about standard and chartered because it is the big headline. it's on the front pages. you know what this says, settles new york claims. this is a lot of money. >> it is. >> i like the journal's take on it, it's a shakedown. >> some argue it is a shakedown.

this is -- that's one way to think about it. i think that might be right. standard and chartered shares are getting a big boost from the settlement announced yesterday. kelly evans standing by. people have called it a shakedown. others have said this is just the beginning. we'll be hearing a lot more and this investigation is not over. what's going on? >> i can tell the investor reaction has been largely positive to the news. shares up about 4%. we saw even a little stronger earlier this morning. still didn't 3.5% on the month, we have a ways to make it since the news broke. looking at the fine this morning and saying perhaps the bank isn't necessarily facing some of the worst case scenarios invesers and analysts were thinking. let's come over and take a look at various settlements weaver seen to date involving this

wire-stripping, a way of removing phrases from the swiss payment system that might block. standard and charitied, $340 million, that's just new york regulators. what we've seen with other banks, this is about the seventh bank we've dealt with on this front. keep in mind, these cover all federal, local jurs dicks. let's start with abn amro, $500 million for that settlement. 2009 where we saw settlements with lloyds, credit suisse. we swing to barclays, 2010, $300 million. then 2012, the big one that got a lot of attention, ing bank, over $600 million was the amount reached with regulators. that's what a lot of people were starting to factor in. it's something when you think about what standard chartered might ultimately have to pay,

that might give you a sense of the ballpark figure. hsbc, as a result of a senate investigation still ongoing. we have yet to get news on that front. $2.6 billion is what regulators have raised from all of these probes. nonetheless, industry insiders are running to standard chartered's defense. one saying the settlement is unfortunate but necessary aimed at presevening the firm's reputation. >> we saw unprecedented threat, unwarranted tlelt against new york offices of standard chartered. they needed to act quickly and achieve rapid resolution in order to avoid any lasting reputati reputation. >> at the same time we spoke with yimy gurule on the show and

says he worries the fins aren't doing enough to stem the bhai. ftse still down about 0.4%. similar tone across the rest of the range. hang seng in hong kong kicked things off on a negative note, worst day since july. bond wall showing a bit of this flight to safety move this morning. italy down 6.7% italy down almost 6%. and better tone than we started off. forex because aussie/dollar was down, in line with china growth concerns. euro/dollar down 0.2% consistent with the mentality. we were down to -- yeah, now down further from the day's earlier low of 1.23 range. keep an eye on that one.

standard chartered on a day with very little economic data otherwise is likely to remain the focus. >> kelly, thank you. andrew, did you read the whole piece here? people should read "the wall street journal" just to get an idea of what we're talking about here. it's pretty interesting. we're talking about the head regulator -- >> standard chartered? >> yes, on the op-ed page. the journal has favorite district attorneys, manhattan district attorneys and treasury looking into allegations but in this case, this guy jumped ahead of the queue and only told these other regulators, the same day, that he was going to to do it is when treasury found out. he called $250 billion transactions. it was $300 million. not $250 billion. now, the bank only it said did

$14 million, so $300 million is a lot more than that. "the journal" is not claiming the bank didn't do anything wrong or its innocent but the last paragraph, hasn't been easy to convince the world to stop interacting with the iranian regime. it's not a platform to make american political careers. you've got this guy -- now we all know his name. >> i've told you what i think we should be doing, by the way. which is that if you are the a.g. or in his position or what have you, you should not be allowed to then run for any form of political office for four years. >> that's a good idea. >> if you think there's overreaching. if you have to -- >> that would save us a lot of trouble, in the past. >> people have made that

argument with -- >> the new york post would not have helped. if spitzer, elliott -- that was a good one. the girls like the column for the post. you even ask -- what was her fake name? ashley dupree -- >> does she still write? >> i don't know. >> we talked about -- i think she does. >> "50 shades of grey". >> there was good tips in there, better than $50 shades of grey". >> you read that? >> no, i did not. but it's going to be a grit movie. >> i would be afraid i would hurt myself if i tried that stuff. >> everybody i know tells me that i -- that it's important that people read -- >> i'm afraid i would be involved in something -- you know who i don't want to end up like? kung fu. >> very true. >> let's open up the market -- >> let's not say anything else.

kung fu scared you. >> a little bit. >> first awkward moment brought to you by joe kernen. >> i welcome that. lou breen -- we lost horshack, did you read that? >> we did. look at his face. lou breen, and bob brusca, chief economist. lou, am i overstating the dog days of august? does it feel doggy like? do you hear barking? >> yeah, sure does. you look at the volume on the stock market -- >> the other markets, yeah. >> there's -- and there's very little -- i mean, even though there has been a direction in the last few days has been completely directionless. foreign exchange markets, as you say, europe is generally on vacation now.

i was auto way for a couple weeks. there was some movement in between but all for naught. >> retail sales yesterday, you like that number, didn't you? >> yeah, nice bounce back they revised to be a little weaker. you take the two months together and wash out some weakness. we're still declining over three months but 6 and 12 months the numbers look better. slowdown looks like a real slowdown but also looks like it's come to an end. i think seasonal factors exaggerated that. inventory cycle we ran. we had a little soft patch. >> aren't we -- >> exaggerated. >> people saying we're now 2, 2 1/2 environment for gdp. not 1 1/2, 2. maybe qe3 is not on the table

now, which is -- is qe3 on or off? >> i don't believe in qe3. >> you don't believe it will ever be done? do you think it should be or it's not dwaish. >> both. i don't think this is sabre mr. bernanke likes to rattle. it's there, he can use it but i don't think he want to use it because he realizes it wasn't a potent weapon. >> the markets diplomat run up on -- they ran up on improvement globally? >> yeah, there's actual improvement out there. you know, at least in the united states. you still have lots of problems in europe. the papers today -- you read papers about europe and it's depressing. this has been coming on. this isn't anything new. this is the problem, is that this sort of wags we've been in for the last four, five months has been pretty much the same. u.s. economy has been weak, shows flashes of strength and showed a soft spot.

europe continues to erode. they can't figure out what to do. it keeps getting weaker. it's like termites. they can't decide what to do so it gets weakened, weakened and they continue like it's not a problem. i think europe is a big problem and getting worse. >> bob, one of the keys with europe is that businesses have no comfort. you know, a multimillion euro investment in madrid today is not going to turn into a multimillion deal in madrid in the future. >> true. >> if they haven't had any comfort and haven't since last year, businesses are treating europe differently since then. banks are ring-fencing subsidiaries in periphery countries. businesses like shell are saying we're done with credit risk in europe. british air and iberia have a crisis meeting every two weeks to discuss ramifications of spain leaving the euro. if you don't have confidence, what the currency unit's going to be in your investment a few

years ahead of time, you're not going to do business as you were. joe, in reference to your tie in yesterday, they can kick the can down the road all they want, hoping for the economic miracle to fall from the sky, but businesses, until they have some comfort as far as the membership of the euro in the years ahead, they're not going to do investment. they're going to ring-fence things as they have been, starting with greece once merkel last fall mentioned -- and others as well, mentioned the membership of the euro may not be contest. thag trying to make sure they have a way to stop the risk should one of these countries pull out of the euro. >> listening ing ting to ollie yesterday, all you can do -- you can't -- >> very few clean-ups. >> all you -- >> until they have a credible plan, joe, that the market --

the world believes they're heading toward fiscal union -- >> all right. >> then there's going to be some risk that some country is going to leave. you don't know the ram ficks, the domino effect. beyond that. therefore, how do you invest? you don't. the other day we had judge smells. we ran some tape and i thought about you because of lou grant and ted baxter and everything else. i don't know when to say to you except -- once again with the tie and the shirt and everything. >> it has all the currencies -- >> blue and white shirt. >> we have to bring currencies back and we have problems -- >> i mean -- >> it's summer. >> it's summer, all right. give the man a break. >> we have to run. coming up, we'll be getting a forecast from the weather channel as the middle of the country looks for much needed relief. you need to see that if you're traveling. the drought of 2012 may mean financial hardships but some

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♪ crops crops crops ♪ crops crops crops >> i don't even know what to say. all day long cnbc and the networks of nbc universal are focusing on the drought of 2012. let's get a forecast now from the weather channel. can you say crops, crops, crops?

>> i can. maybe not like that gentleman there -- ♪ crops crops crops >> i love it. here we are tracking the weather situation here. we are certainly finding our bit of rain. not necessarily where we need it to help out those crops crops, crops but finding heavy downpour across england. getting into boston we'll find heavy downpours. could impact some commute for you there. we'll be watching showers across north texas, in and around dallas. this heavy rain has been in place all morning long. now finally starting to shift south but it's already left us with some flash flood warnings in place all the way through portions of southern sections of arkansas. all thanks to this frontal boundary that will push offshore but bringing us rain across new england and sections of the mid-south. the attention will turn to the next system, driving in under

the northern rockies and ain. the hope is that will bring in some drought relief to the middle of the country. those areas in red and orange, that's where it's extremely dry. we'll find rain coming in with the next system but the problem is, it's not going to be that soaking rain that we need over days. it's going to be a fast-moving front. wednesday, here's the position. thursday, moving through the midwest. quickly by friday, heading to the ohio valley and back into the deep south. we're already dry behind it for our friday. by the time we get into the weekend, it's already now at the coast. again, not going to get much help in the middle of the country in term of drought relief. what we will get is a cooldown. yeah, a lot of these areas have been baking, including places like bill lgz. yesterday's high, 97. 65 for your high today. that cool air will press on to the south and east. >> thanks, alex. cnbc and networks of nbc universal are taking an unpress

deputied look at the drought of 2012 and we'll have a special half hour dedicated to the situation and impact of the nation's farmers and you coming up today at 1:30 p.m. eastern. the markets coming off flat tuesday. this will not affect tuesday? this is a flat tuesday. will this trend continue. at 7 a.m. best selling author will join us bringing friend like celtic fans and producers putting "50 shades of grey," the ones they're -- --. >> it's not going to be rated "r." i don't know how they could do that. >> can i have a look at yesterday's winners and losers. ♪ ♪ but i still haven't found what

i'm looking for ♪ ♪ why not take a day to explore your own backyard?

with two times the points on travel, you may find yourself asking why not, a lot. chase sapphire preferred. there's more to enjoy.

welcome back to "squawk box" here on cnbc. i'm joe kernen along with andrew ross sorkin. becky quick is off this week. if you didn't hear me say it that time, good morning, i'm joe kernen with andrew ross sorkin. becky ross is off this week. >> it was in the prompter twice? >> yes. >> that's okay. >> people to emphasize them, because people aren't really listening. the dog days of august. people are tired.

it's early. futures this morning indicated a little lower after a flat session yesterday where we saw a gain of two points. major retailers are reportedly set to announce plans for a mobile payment network. "the wall street journal" has this piece. says the announcement could come together, involving walmart, target, 7-eleven and others. staples is reporting quarterly profit of 18 cents a share, below estimate by 4 cents. they blame softer than expected north american sales and weakness in europe. "new york times" has named mark thompson, outgoing head of the bbc to take over wall street journal. there was a time when they said you might. >> i took myself out of the running early on. >> i'm not kidding. don't make a joke. there was a time your name was bandied about because you're young -- you couldn't because you signed a contract here? >> she left like a golden parachute. he had wasn't in long, was she?

>> karen robinson was there for over 20 years. >> but not as ceo. >> oh, no, she was the ceo practically for the last -- >> and then what happened? >> unclear, is probably -- >> not old. >> no, no, no. but i think it's --. >> what do you mean it's unclear? you worked there. do you have any scuttlebutt? can you tell me anything? >> it's one of the great mysteries of the new york times. i feel comfortable saying it is -- >> can you say -- >> she had done a great job for the country. arth arth arthur sultzerg would tell you -- >> what? he had had done a good job? >> the stock prices going down. >> there are sick you lar and -- >> that you need to deal with as ceo. >> you do. mr. thompson will be joining us. is that his name?

>> hopefully you have some ideas for him. >> he has his own ideas. >> hopefully he won't sees awe a threat. >> by the way, he's done a remarkable thing with the bbc. >> i hope you says down the bars on the windows. you know how the new york times building -- the cheap tunnel out to get out of the -- >> i tunnel out every day. you know that building was designed by renzo piano? >> i heard the audio. they may be telling us to move along. >> let's take a look at the markets. right now for those traveling -- by the way, there it is, 93.20 on wit crude. i got a tweet last night from someone saying do you really drive a zip car or -- >> you do. >> i have done it once or twice but i don't really have a zip car subscription.

>> is it a subscription you -- >> you need to have one. >> you borrowed the parent's car this time. you like -- >> i'm a subway guy. >> i know that. you borrowed your parent's car. >> i have. >> you just did it. >> i did. >> you couldn't believe how much it cost to fill the tank. i mean, it killed you. like some moth flew out of your wallet when you timely took it out, right? >> i did it myself, i want you to know. >> you pumped it yourself? >> absolutely. >> did you get regular or a little above regular or all the way to premium? >> do we have time to talk about this? what are you supposed to do. >> what kind of car is it? >> it was a -- it was a lexus es 300 or -- >> you might go a little above regular. i wouldn't go all the way. you know what, i might be a sucker. >> i do want higher octane but sometimes you don't necessarily need it. i'm not sure.

>> it was my parent's car so i felt i should give them a little extra. i don't want to screw it up. the ten-year for trying to get a mortgage or refi -- >> wow. >> car loan, too, 1.764. >> yesterday it moved up. >> it has moved up. a quick look at gold. who's now back in gold? >> paulson and soros. >> back in gold. >> it is amazing we saw wow at 1.76, isn't it in. >> yeah. >> that's sew ridiculous. >> we were talking about 1.4 at one point. we have more data on the way. the consumer price index will be released at 8 a.m. eastern time. let's focus on the markets and figure out what's going on. joining us from chicago at cme, senior vice president -- we've been talking about how we were in the dog days.

so, is there anything you can tell us this morning, besides your coat always provides an interesting visual. a thought might help us as well. >> i think you're exactly right, we're in the dog days of sum, especially august. the market wants to gravitate higher. there will be no bad news out there. this august the europeans are on holiday and they're happy to be on holiday. they had i rough year. when they come back in september, nothing has changed. we've seen the ten-year jump. we have cpi and investor reduction this morning. as long as those numbers don't come out horribly bad, it will support the market because not a lot going on. eventually we'll see 1, 1.5% on the ten-year. the world has not changed and we're negative. >> here's my dog days of summer question. is it possible when we come back post-labor day we're either in

for a shock on the upside or downi'd? >> i think so. i don't to be too much -- i cried wolf too many times here. i ult mtly do think this. we are in a total rate compression cycle here. we've taken a breathe other the ten-year, but ultimately we have negative rates in europe on some thing. we can see negative rates here. what i find interesting is 100 or par on the euro/dollar -- >> that's your tipping point for that? >> is that europe is almost unsustainable at this point. if you read the rhetoric coming out over the last two week, we've seen a really big rise. they're now starting to prepare their people for something bad happening. >> why is that not already baked into the cake here? >> it's not a big deal to the cake because it's the middle of august and people -- why wasn't it baked in the cake last year? we said this when euro was 1.4. now it's 1. 2.

whenever we get decent news out of europe, the 6 bth 2% instead of 5.5. the market rallied. after five years of a recession in greece, the market takes a plus 0.3 as something good? market's too afraid -- also a psychological work for the fact if something is staring you in the face, sometimes you're so afraid you can't make a digs. i think that's what we have going on in europe right now. >> we'll leave it there. thanks for joining us. i don't know if it's an optmyic way to leave this interview, though. it's depreing. >> if you have any comments or questions about anything you see here on "squawk," e-mail us at squawk @cnbc.com. the drought of 2012 is

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welcome back to "squawk." take a quick look at futures. red arrows across the board. dow down 17 points, s&p 500 off 2 and nasdaq down 4. paul ryan took the show to

vegas yesterday. he was there to meet with the mega gop don't donor sheldon add addleson. ryan's next stop, highway highway. he's got some places to go. you know, that speech came on the same day sheldon adelson was on the front page of the "new york times" and other places about his bribery case we talked about in china. >> you saw our current vice president? we're going to put y'all back in chains. >> i saw that. and then i saw -- >> he said he's not really sure -- he said he's not sure joe has the mental capacity to become become president. >> did you see the quote from romney afterward? take your campaign of division and anger and hate and shove it -- >> take it back to chicago.

>> it's getting nasty. i don't know if you've seen the number of advertisements in the past 24, 48 hours, on both sides, it's turning decidedly negati negative. i'm not sure what that's a function of. >> crop yields, perhaps. we'll talk crop yields and businesses, being hurt by the worst drought in a long, long time. how long was the drought? it's one of the worst droughts in u.s. history. there is opportunity in water stocks. jackie is reporting from american waters location in kentucky. near where i grew up. good morning. >> reporter: good morning to you. no doubt it's been achallenging time for farmers and businesses in dealing with this drought. but the volatility we've even in the weather pattern is create,ing some opportunity for companies poged to provide solution at this difficult time.

water utility companies is one segment being impacted here. they are seeing a benefit. we're in owen county, kentucky, american water facility, it was built two years ago in response to drought conditions. we've seen how america's water is staying ahead of the drought with operating inefficiency. this increased pushage is expected to -- >> for the quarter, that additional pumpage was six to nine cents. and for the period through july, it's 13 to 16 cent. we increased our guidance by 22 cent. so probably about 70% of the increase in our guidance was driven by weather-related impacts. >> reporter: and that was the ceo of american water. we also asked him about the

future of water reserves. for now he says they're in good shape. once the drought dies down, water utility companies focusing on water conservation. how would they do that? >> that's a great question. as a matter of fact, you'll be surprised by the answer. the answer has to do with waste water. 1% of the water of all water is drinking water and that need to be purified, obviously. the rest is used for washing dishes, laundry,ette. they said we need to reuse's water for household shares. it will be being too see how they do that. >> ever been to bermuda. >> i have, actually. >> every roof is a catch basin for -- they don't have a lot of appreciate water. have roof has a catch basin. and water, we've said it again

and again, going to be -- more valuable than oil some day might be. appreciate it. cnbc and the networks of nbc universal are taking a look at drought of 201. we'll have a special half hour dead kited to the impact on the nas's companies, farmers and you, today at 1 p.m. eastern. >> that's a big deal. water is a very big deal. coming up, we are the headlines you need to see. later, the producers that are going to tell mega best seller "50 shades of grey" they're taking it to the silver screen. the next chapter of "squawk box" up after the break. "squawk box" wants to hang out with you. join us right after the show on google plus for a special conversation with andrew and ben. at cnbc to your circles and post

your questions and comment. use the hash tag squawk comments to have your questions answered. [ male announcer ] when a major hospital wanted to provide better employee benefits while balancing the company's bottom line, their very first word was... [ to the tune of "lullaby and good night" ] ♪ af-lac ♪ aflac [ male announcer ] find out more at... [ duck ] aflac! [ male announcer ] ...forbusiness.com. [ yawning sound ]

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for androgel 1.62%. what are you waiting for? this is big news. welcome back to squawk this morning. we have a little time and we want to talk about some headlines. a giant hospital chain, hca --

>> the frist family. >> they're blazing a profit trail. this was a deal that became a priec private equity deal. >> bain was one of the partners. >> very successful deal. they've done remarkable thing information terms of the stock price. however, talk about profit motive and what happens. there are now some questions -- by the way, this seemed to be quite fairly done, looked at what happened in emergency rooms, meaning one of the things that they it was make it harder so if you go to an emergency room, if you don't have insurance, they tem you to go somewhere else, unless you're really in trouble, in serious trouble, so you couldn't use it as a doctor's office effectively. and also what they called upcoding. there are different codes that you can use to get reimbursements from medicare and insurance companies and they

took -- they started using codes that made some of these services more expensive. and what does that mean? so i thought it was a very interesting piece about what happens not necessarily when private equity gets involved but you talk about for-profit hospital and what that always means. >> it's the greater question of whether there are certain things where the profit incentive is not a positive, it's a negative. you know how i feel -- >> there are some innovations and other things. >> here's what brac i don't know sa -- bracken said. he's a chief executive. there's no sustainable business model that doesn't have at its core a provision of high quality patient care, you can't survive. so they're doing well, stock's doing well, investors doing well, they're able to expand and to add other hospitals, they're able to upgrade facilities. if you're a hospital that's broke and going out of business,

that doesn't help. if you're providing over and above -- just over the top care, where it may be wasteful in terms of what you're doing and you don't stay in business, that doesn't help either. the question is we hear about health insurance. with health care we shouldn't have to look for a profit with shareholders, we should use all that to provide the care for people. that sounds good on the surface but then you realize a lot of times if you need to earn a profit, you need to be much more efficient, you need to innovate and do better than your competitors. we've seen in most instances there's only a few things we give to the public domain to do, fire, that have to be done, police. but most things, most things work better if there's -- that's what we learn. >> the reason to me that was interesting about the piece was the fact that they've been successful but at the same time

there are some doctors who have said they have questions about what's going on. >> earlier we talked about images. now it's going -- going to be taken over for 3.5 billion. these are examples. you should say we did that story as opposed to doing the story we wanted to do. kb. >> if we want your brand in the gutter -- >> i talked you out of that one. >> "fifty shades of rage," we're going to be talking about "fifty shades of grey" later in the show. >> that's not the banker. that is the girl that got mad. >> 2012, the battle between farmers and big business. water and crops and cooling down factories. first from bringing down the

house to "accidental billionaires." ben mezrich is in the house after the break. ♪

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talking stock of your profits. the august rally could be stalling. we'll see what that means for your money. >> big money, big business. >> this idea is potentially worth millions of dollars. >>. >> best selling author ben

mezrich mezrich is our guest this morning. >> and the boston celtics ceo is here on the business of basketball and more as the second hour of "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. we've got a big show today. becky's on vacation. let's take a quick look at the futures. we've got red arrows across the board. dow looks like it would be off about 16 points, nasdaq off about 3 points, the s&p off 2.5 points. we're expecting quarterly earnings shortly from retailer targer, looking for a second quarter profit of $1.01 per share on revenue. liberty media is closer to

taking control of sirius xm radio. liberty has applied to take effective control of the satellite operator. many of viewers hear us on xm. and stanchart shares are up after settlement. the banks are still in talks with federal regulators about its transactions with iran. you don't know -- >> no, all my music knowledge comes from sirius xm. but i would never say anything positive about it because of him and whenever i do he says we don't even want you admitting you listen to xm --

>> he's much hold hold older than i am. don't let him hear i said that. >> he writes in. >> he writes in and i don't need that in my life. >> meanwhile let's talk about the elections and campaign. after meeting with big donors on the las vegas strip, republican vice presidential candidate paul ryan is getting set to a trip to ohio today. have you been sleeping or you have been ul all night? tell me you've been up all night. >> we've been up a lot of the night. we were over very venetian trying to keep an eye out for paul ryan, who we were told was meeting there potentially with sheldon addelson, who owns the

venetian, a big, big, big republican campaign contributor. we presume that meeting happened last night. we were staking him out in the lobby there. there's a lot offin transs, it's a big casino. i did lose $30 playing black jack last night. that's all that happened there. we were here traveling with paul ryan. he made a speech at the pal verdicte high school just outside of las vegas. you've got sort of las vegas itself and then the niekds get much more conservative and presumably gop friendly. it was big crowd there last night for paw ryan. we were told he was going to speak a lot about housing. he gave instead the standard stump speech. take a listen to what he had to say last night in las vegas. >> we're not going to go to the people and say the other guy is

so bad, vote for me my default. we're going to say here are our solutions to get us back on track. >> yesterday a little bit of tension between the press corps that's following paul ryan and the campaign itself because just before that event yesterday, ryan addressed an overflow crowd out at the high school. he went outside with a bull horn, addressed a big crowd of people that had gathered that couldn't even get into the venue but the press was not allowed to cover that event. they did not allow us access to get out of the building and cover those public remarks. that's typically a no-no. they're usually allowed to cover whatever the candidate says in public. so a real question on whether we getting enough access to paul ryan. but he's only been the vice presidential pick here for a couple of days. they're getting the campaign in gear here at this point, guys. we're going to ohio later, we're

going to be at miami university in ohio and that's paul ryan's alma mater. we'll hear what he has to say there, guy. >> you're a wild man, eammon. you were throwing up $1, $2 a time on those hands? >> we sat down at the $15 black jack ha -- a hand black jack table. we sat down at the $25 table. we said that's too much for us. she had to talk to the manager. >> why? because you're cable? >> you know who my bosses are. we're a stripped down budget out here. >> i want you to put 10,000 down on -- -- we have ben mezrich. put 10,000 on 21 if could you. if it doesn't work, can you expense it.

>> i will definitely do it. wire me the money. the ka seen opens are still open. >> we talked to the suits pup can go ahead and expense it. >> i'll put it on the card. >> carlisle group acquiring getty images, $3.4 million, who are buying it from held hand manned and freeman. you have a private equity firm selling to another private ek pit firm. they call it a hot potato. traditionally the first equity firm is going to see what they're going to do with it.

often times they're selling to themselves. some of the owners of the first fund have to do with the second fund. >> getty images, it's weird that pictures and images are worth $3.3 billion. it's content. any newspaper, any web site, anything that has a story you need a picture there and you need to get it somewhere and a lot of times it's getting images. >> do you want me to show you -- i put in kernen. this is the picture they have. >> any good ones? >> this is what you get. it's a little mouse. >> this looks like a journal. >> i'm going to put in -- how did you do that? >> i went to getty images, i put in kernen and i get mouse.

>> i'm putting sorkin in there. >> first i'm putting kernen and see if a jeshily comes up. once that rumor gets started, richard geer -- >> i didn't put that in there. >> how do you spem kernen? >> kern-e-r-n-e-k-e-r-n-e-n. >> i apologize for this. >> no problem. >> the way we set you up, how politics will affect the stock market. what's your view on how the next three months play out depending on what the polls say? >> the market will be in two different phases, one from now until the first tuesday of november will be determined in the face-off between the slowing

earnings pictures and central banks trying to bubble blow the economy higher and the last two months will be determined by the outcome of the election. >> all right. so depending on which way it goes, how do you expect the market to react? >> at least for the last two months of the year if romney win the market goes higher, if obama wins, it goes lower. it will also depend on who gets the senate. talking about the latwo months of the year, it's going to be very black or red. >> how about the bond market? >> i think the bond market has lost some of its safe haven on the hopes that central bankers are going to somehow make things better and boost the economy both in europe and the u.s. it has lost some of that safe haven status, at the same time the stock markets continue to rally on the hopes of more central bank action.

>> isn't europe and china, isn't it just as important? >> right. that's why the elections can only impact the last two months of the year. we'll be back to slowing economies troubles in europe and the issues we have here in the u.s. >> what happened in europe, do we fell better about europe and worse about china over the last two weeks? >> central bankers can create this illusion that things are better. but that wears off if you don't deal with the crux of the problem. so mario draghi made us feel better with his words but we're not all of a sudden seeing declines in the debt levels of spain and italy. we're seeing decline in their bond yields because of what he said. ports of the world are suffering from too much debt and i'm not seeing any progress being made on any of that. >> peter, we appreciate it. thank you. >> before you go, if you put in joe kernen --

>> i put in sorkin and;. >> if you put in if you put in joe kernen, you get this great picture of you. >> i did put in kernen and got the gerbil, too. i'm going to find out who did that. comments question. i have so many gerbil jokes but i can't say them on air. you can follow us at quitter. coming up, author ben mezrich will join us. can you see his shoes? blue suede shoes in the morning.

is that something? >> black jack, sex on the moon and social networking. ben's big spot is next. ♪ [ male announcer ] aggressive styling. a more fuel-efficient turbocharged engine. and a completely redesigned interior. the 2012 c-class with over 2,000 refinements. it's amazing...inside and out. ♪ join mercedes-benz usa on facebook for the best summer swtakes.

♪ don't you step on my blue suede shoes ♪ >> we're back on squawk.

that song is for our best host, ben mezrich, who is wearing blue suede shoes. put your shoes back up on the table. he's the author of the widely successful "accidental billionaires." up know this book because that became the basis for the movie "the social network." the book debuted at number four on the best sellers list and stayed there for a while. and the author of one of my truly favorite books "bringing down the house," which was turned into a movie called "21." thank you for joining us. >> thank you so much. >> you've become an investor, run as virtual media empire, he has a new book being turned into a movie. you have a lot of views and you've brought some friends with you today. >> your audience is essentially who i try to write for. it's very cool to be able to do this. >> i was thinking a lot about us because i was going back and

reading parts of "21" and looking through all of the books you've written, "ugly americans" and the others. you have found a way to tap in to both young people and to writing about manned the culture of money and traditionally the books have been about the success and money and what that means and today we're living in a place -- this is almost a zeit geist kind of question. if you were going to write forebook tomorrow that had to do with business and money, would it be different than the kinds of books you wrote about prefinancial crisis given the way it feels like the world has changed and shifted their views about all of this? >> it's interesting. it's a good question. you know, i love that whole world in between right and wrong or people who take risks, that adrenaline junkie kind of business person and the young person who looks to become a billionaire who wants to get theirs for some reason or another. i feel like i wouldn't change

what i'm going to write because even though the global economy has changed, i feel like young people are still full of this incredible ambition and they want to take these risks and they want to live in this exotic locale and do it all. there's this depressing weight on everybody's shoulder but for what i'm interested in and what i write about, they're still out there, they're just finding different ways to do it. >> as commercial? you're a pretty commercial kind of guy. >> the economy has changed also the business of books has changed, readers have changed been but i feel like my core, the young guys out there trying to do it, they're flailing in that the economy around them has changed but they personally haven't changed. that's my feeling. but you're right, a different book becomes successful today. if you look at the big books today, sayer s&m porn and young adult, which is the two -- i would still right about those

young guys trying to live that life. >> if you had to write an addendum about to "the accidental billionaire," given what's happened to the ipo and the mood inside the company, what would you write? >> if i were going to write about facebook today, it would be a very different story about facebook than when mumberg was a college sophomore. now he has to be an adult in an adult business and the whole world is watching. >> i think that's probably a very good book for you to write. >> it would but there's a lot less hooking up on yachts. >> he's married now. >> he's married. >> maybe he's read "fifty shades

of grey" and things are good. >> this is -- some guy who is do that. there was an investment banker, that's not hip, but he's 53 years old and heap had someone that would come over -- a live-in slave that he would whip every night. i guess we're allowed to say it. i feel uncomfortable saying it. but "fifty shades of grey" there must be something to it, it's titillating -- are we allowed to say titillating? i guess it is. >> it going to be a great movie. >> which is bound nbc, which is

owned by comcast. >> we're in this political culture. i think we're in the same generation together, you have an optimism more so than what's reflected in the media. >> i'm optimistic because to me the american dream was never quite what the american dream was offer the cover of "time" magazine. it wasn't really the white pickett pence and the house in the suburbs but it was charting your own way and doing something incredible and crazy and finding that happiness in your life. i feel like those opportunities haven't really changed. with at global economy and everything moving so quickly, those opportunities are getting stronger. >> that's how it's described -- i think you skimmed "road to freedom", the arthur brooks book. but to have the freedom to across your own path, to live by

the consequences that are either good or bad, that succeed or fail, earn success, what we're able to do here, not getting this evenings coming this way. i don't think anyone wants to be on the assistance of government. no one wants to be permanently like that. whether you make 50d,000 a year, $100,000 a year, $10 million a year, if you do studies the people in a make 50 that are entrepreneurs and have done it and earned their own success are just as happy in life as people that made a million. the people that aren't are people that are hopeless and feel like they're not controlling their own future. >> that's really what it is. >> i agree. >> if you look ahead -- >> your official line of questioning, edidn't appreciate it just because i don't -- as if something has changed about what people want to get out of life because suddenly we've had someone telling us don't chase the corner office, go into the giving fields, go into the social work. we've had someone telling us that for three and a half years as if that's a more noble -- as if owning a business and earning

why are success is not something noble -- >> the reason i asked the question and i was hoping to get -- >> you heard -- >> he looked at me like what are you talking about? >> not only that but kids now adays want to buy all the apps you can buy on the webs and they don't have jobs from 21 to 26. so they're like how can i have fun in this great new world when i don't have a job and i'm living at home? >> the reason i asked the question, when i was going down to zuccotti park -- >> those are outliers. >> they were traditionally young people. >> i'd be mad, too, if i didn't have a job. >> that's not reflective okz. it was the sense a lot of these kids had gone to good colleges, i graduated, i don't have a job, i'm in debt $50,000 and there's a whole argument about inquality. it's a real argument if you look at the young people in the

unemployment lines, it's a different situation. that's why i was trying to get at this question. i think there is a bit of a shift in the zeit geist. >> i definitely see what you're saying. there is a shift in the emotions around it. i feel like people feel more desperate yet i go to events and speak to so many young people and it hasn't changed, that fire, that passion. >> hopefully it won't. >> we've got much more from our guest host ben mezrich, who will be next us for the next two hours. >> usually if the unemployment rate is 5%, it would be better. 8.3% is not good for anyone. >> coming up, the worst drought pushing pressure on farmers and big business. and we've got your business angles covered. we're back in just a minute. >> time now for today's aflac

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now the answer to today's affleck trivia question. how was the film "pride of the yankees" about? lou gehrig. >> today after the show "squawk box" is trying something new, a google plus hangout. guest host ben mezrich will stick around and join us. we have neil robertson, we have matt lauz oon, jon steinberg and jeff ma, the basis for the smash movie "21" and was at the heart of ben's book. all you have to do is sign up for google plus. all you have to do is add cnbc to your circles.

the squawk hangout begins shortly after the show. you can adamants and listen to the guests and shoot us questions at squawk. the drought of 2012 gripping farmers and big business. we're going to be talking about that. and then the business of basketball. find out who celtics co-owner -- this guy is a friend of yours, right? how does he feel about the dwight howard trade and what's going on up in boston. squawk is coming back with that and a lot more.

. welcome back to "squawk box" this morning. mortgage applications fell 4.5% last week. applications for both new home purchases and refinancings were lower as mortgage rates remain stead. the national association of home builders is out with its month live sentiment index with economists expecting the august reading to remain unchanged from

july. and we're an hour away from july. consumer price indexes, economists are looking for increases in 0.2%, the core rate figured without food and energy. and i believe you have numbers where target just came out. >> looks good. the earned $1.12, 11 cents ahead of expectations. this is the fiscal second quarter that we're talking about. the company is also talking about third quarter net of 83 to 93 cents, country is versus expectations of 7 6 cents. second quarter sales up 3.5% to 16.5 billion, which is just a couple of hundred million below the expectation of revenue. they may be -- those are sales. let me see if the revenue number -- sometimes it is different. sales rose to 16.and 16.751 was

where first call was at this point. we've got a 64 bid now on target and an ask of 64.40 and it closed at 63.38. so the stock is tracking higher. so we got the outlook for next year. now the full year adjusted net is 4.65 to 4.85 and it's at 4.31 right now. so they raised third quarter, they beat on the second quarter and obviously they're looking for a little bit better in the next quarter to get all the way up to what i said, 4.65 to 4.85, which is well above the 4.31. 73.19 billion in revenue is also the forecast they're giving us and 73.188 is what's on -- >> ben, do you shop at target? >> i do. i love target. i think my wife goes to target. >> do they sell your books at target? >> not that i know of.

>> i think they were selling kindles for a while. >> kindles are everywhere. i feel like you can get it at 7-eleven. >> the nook. >> the nook. >> i was going to look for a comp story number but -- >> we'll get more. >> as water levels fall, temperatures are rising, farmers and ranchers are the most visible victim of this year's drought but big business and tourism are also feeling the costly impact. phil lebeau must be like a renaissance man. if you need anything on boeing you go to lebeau. anything on the automakers, you go to lebeau. now anything related to the drought, who do you go to? lebeau. >> usually this time of year,

middle of august you would see dozens of boats docked at these piers. you've got to go out another 50 yards before you see the edge of this lake. we want to give you perspective on why we're here at lake travis. this is a huge area in terms of boating, tourism, recreation is a big parts of the local economy here. lake travis is down at least 28 feet, the lowest it's been in 40 years. we talked with one business owner on the lake who says they're getting hit harder than ever. >> we're getting really beat up pretty bad and, you know, i never claimed to be the smartest guy in the room. if i was, i probably would have quit a long time ago. but i honestly just don't know how long we can hold out. >> and as we're back here at lake travis live, i want to give you one thing to keep in mind. about $21 million. that's the potential financial

impact of this drought beyond the farmers in this area and the ranchers, we're talking about boating, we're talking about tourism. that's the impact. we're going to be here all day long. as the sun comes up, you'll get perspective on how low the water level here is at austin. >> thanks phil. up next, ceo of the boston celtics wyc grousbeck joins us to talk about the business of basketball. "squawk box" is back in just two minutes. okay, here's the plan.

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boston celtics considered by many the most storied team in the nab be in now set to take on the heat as part of an opening night triple-header this fall. joining us is wyc grousbeck, managing partner, governor and chief executive officer of the boston celtics, coming off i would say a pretty good week for the nba, considering everybody in the world was watching, right, wyc? >> it was a great week for basketball world wide and the nba stars brought the gold home.

real happy about that. >> when i'm watching, i mean, maybe it's just me, but i expect these guys to win by 60 points every game. and whenever there's a country that you don't think of as the center of the world for basketball, whenever they keep it close with lebron and the greatest players in the universe, should i be voois they can keep it close or do they have to do that so we don't put something else and on win every game by 50 points. >> i'm sure they wanted to win by 50 points but the truth of the matter is the game is international. those guys have been gunning for us for years. right now they're all getting ready for rio in 2016. that's the fun thing about basketball, anybody can win any game. we almost proved it against spain but we pulled it out at the end. >> i move to boston and i think '78. wasn't it '77, was that michigan state versus indiana state?

i think that was the ncaa finals. so magic came up to l.a. and larry came to boston. for me it's just neff been -- i've watched every game i possibly could and it will -- will it ever be that good again, wyc? i guess you think it's that good now but -- >> i think it was marquette in '77. >> maybe it was '78. you remember indiana state and michigan state. >> i do. >> magic and larry met in the ncaas and they were the two main guys with the boston-l.a. rivalry. >> that propelled the nba into a new stras os fear into the 80s and it made everything go great and we're trying to get back to that level. >> how you going to do it? >> we may be entering a new golden age in the nba right now with these stars and this new -- the media interests in these teams, the fact that these are, you know, the fan support and attendance and media revenues and new labor deal and

everything. i mean, things are going great in the nba right now. it's not the 80s. we aren't the dream team of the 90s but it's going pretty well. we're really happy to be part of it. >> one of mile-per-hour idols, i'm a huge celtics fan. as every sport watcher watches basketball, you think to yourself owning a team must be the greatest thing in the world. is it a business decision, is it a hobby, a great toy or is it a straight business thing? >> i bought the team with my partners for reasons other than business. i'd have to say it's because we love boast, we love the celtics and we love the chance to take on the great challenge of trying to win a championship. underneath that there is a real business and it's more than doubled since we came in. everything's gone well. not everysongle year but things

have gone so well. it's the only hobby or toy i've ever had that turned out to be a great investment. but we're here for other reasons. that's probably why we enjoy it so much. the wins are great, even the losses remind up that you're human and that the wins are special. it's so much fun and such a challenge that it probably is a good business because it's so interesting to people. up don't know what's going to happen. >> wink, i was just going to ask you about valuations of team these days. you've soon what's gone on in l.a. with the dodgers, the padres or even this is going public of manchester united last week. >> do you think these numbers make sense? do you look at the numbers with amaze snent. >> i guess i look at it with some relief. the truth is when the new media contracts come in, we've seen teams in the nba have media deals, partnerships that were three to five times high are

than they were in the previous round of contract discussions. when you've got that kind of money coming in, that's what i think fueled the dodgers sale was a multi-billion dollar expectation of future tv rights. so when it turns out that sports is driving cable subscriber pick up and is driving the bus when it comes to people choosing entertainment options, it becomes a very valuable business. again, that's not the reason you should probably get into it but it's the reason that these teams are selling for what they sell for. there are real numbers behind it. >> you're in the private equity business. do you think that private equity firms should actually be buying these teams as investments? >> i think you can make money in sports. it's $100 billion plus business, it's going to be $2 hoon billion or $300 billion i think before too, too long, i guess, i hope. but having said that, i think the best ownership, my partners are examples, local people who love their teams and care enough to go over and above to try to put the best team on the court.

so if you lose that connection with really caring about the team, you're going to lose something in your investment. if you can do them both at the same time, can you love the team and run it well, then things can really work out. >> with. >> have you chafed at all with the conversations we've had about private equity in the past. >> i'm really a full-time ceo now. >> you were at highland, right? >> i can see in the rear view mirror there. >> we had pags on. >> steve and i and my father, i ever grousbeck, run this team. we go through the ups and downs to the. then steve goes off to dubai and brusels to run the world economy and leaves me to run the celtics

back here. >> private equity was good four because you can no run the celtics are was it good overall you think? was it a positive force for society? >> i think it's a huge engine, bain capital particularly but highland where i have been and still have an affiliation. we're starting companies. i was helping start little medical device companies, buy yof tech companies, trying to cure diseases, curing blindness and heart disease, trying to, working on cancer. i think these are important things. when you harness the money of investors, put them to good use, you know, you can feel good about yourself at the end of the day. >> what were you saying about bain? bain has been a positive for society as well? >> i have a number of mean eight or nine investors in the celtics who are bain capital partners and these are some of the finest and most charity. >> and most generous people i

know. i'm glad they're doing what they're doing. i have a bias but i've seen them for ten years and they're the real deal. >> you're someone who knows so thank you zip got to ask more questions about the celtics because i have you on and i'm from boston. kevin garnet and rondo are two people that fascinate me. i know there's got to be a lot of stories about garnet, his passion and his emotion. what's your favorite garnet story? >> the funny thing about k.g. is that there's really no story because there's a 24/7, a continuous loop. you couldn't even break it up into stories. you'll be on the team playing at 3 or 4 in the morning and you'll hear this noise nonstop talking and it's k.g. from the moment you take off to the moment you land, whatever hour of the day, he's talking to rookies, he's telling stories. he's just nonstop. there's some sort of nuclear reactor inside him that never

quits. >> how does a guy like rondo happen? i felt like he appeared out of nowhere and suddenly he's one of the best players in the world. it kate out of nowhere to me. did you see that happening? >> no. we're lucky to have danny ainge here. ryan mcdonough was an early scout who saw rondo. danny and ryan saw him at oak hill academy in high school and danny said at that point he was going to be the starting point guard of the celtics three or four years later and that's what happened. danny had his eye on him very, very early. that's a competitive advantage we have having danny ainge as president of basketball. >> one more question, did you think that last year did we almost not have an nba season? we were really close it felt like. is that something that could happen given and did it almost happen? >> it did almost happen. i think that's fair to say. i was part of those negotiations, part of the group in december that really got together and said let's settle this thing. so i'm really proud of that to be honest.

i'm glad we settled it. i'm glad the players are happy, i'm glad the owners are happy. if we stick together here, we've got a great thing going. we managed to settle it in december but definitely during negotiations there were times when it wasn't clear when my summer vacation was going to start. it might have been starting in january. >> i guess it was '79 was msu. and where did he go, danny? he was a prospect. >> danny went to byu. we call it the princeton of tu tau. >> mchale came from -- >> minnesota. >> and d.j. -- i'm like an old guy that says remember the day, remember the day. and james worthy -- >> please don't mention any lakers in this interview. >> i'm sorry. butch we remember what that was like watching back then when these teams met.

i remember one where larry stole that inbounds pass -- no, d.j. stole it. >> we want you guys to come sit courseside with us with me and my wife corine, come on up and you can learn all the new players. >> that's an offer. >> now you're talking. >> you can't beat that. >> that's where you can tell what's really going on and these guys like 8 feet tall. >> i'm looking forward to that. >> wyc grousbeck, appreciate it. >> you know who is often in the stands for boston, maria men union owes. >> oh, yeah, she's there. >> at the top of the hour we talk about europe. did i tell you i saw spike lee? >> you're a dog. >> oh, man. squawk is going to be right back after this very short commercial

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the great thing on the video, john is playing guitar for her on guitar. he's going i got to be here, i'm married to her. it's almost like modern art. he's thinking i can't diss her, she's my wife but this is bad! let's take a look at some stocks to watch. we used to watch that one all

the time. it's called "we are water." that's why we ran that today. you know, i'm starting to like it. >> you listen to a song enough times, it becomes good. ♪ we are water >> it's an acquired taste. target earned $1.12 a share for the second quarter, excludeing certain items, 11 cents above estimates. and it also raised full-year earnings guidance. you can see early morning trading we are seeing there. that's not yesterday's close. staples earned 18 cents a share. north america was weak and europe was also weak as well. you can see that's going to be a loser. abercrombie and fitch earn 19 cents a share. and finally, deere earned $1.98

a share for the third quarter, well short of estimates at 2.31. the heavy equipment maker said sales fell short of expectations in international markets. >> coming up, "fifty shades of gray" is getting the movie treatment. the best selling erotic novel is being adapted for the screen as a movie, an r rated film, not an x rated film. we're going to speak to the men behind that. tie yourself to the tv. can i say that? >> you can see that. >> tomorrow we'll talk tech with guest host henry blodget, ceo and editor in chief of "business insider." >> we'll get our morning started with the ceo of dunkin donut. plus breaking economic data, weekly jobless claims and housing starts hit the tape at 8 a.m. eastern. you can call them anytime you feel like saving money.

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the european union narrowly avoiding recession. but will eu leaders keep their budget in check as they try to

restart growth? >> it's the erotic novel that brought bondage and s&m to the main street world of fiction. >> i do respect limits. what's your safety word going to be? >> help? >> we're going to talk to those responsible for bringing "fifty shades of gray" to the big screen. >> and our extended coverage on drought continues. supersedes that can resist heat. ♪ looking for some hot stuff, baby, this evening ♪ i need some hot stuff, baby, tonight ♪ >> what? you need some hot stuff?

you don't know who it is? >> it became a commercial. >> donna summer. >> she did pass away a couple of years ago. >> welcome back to "squawk box." first in business worldwide. ben is very avant garde. >> i didn't find that song so screechy. it was all right. >> up heard some of the orchestra playing offer that. becky quick is off this week, i'm becky quick with -- i'm joe kernen along with andrew sorkin.

>> the book takes place in the underground sex world of tokyo. >> did you go there? >> as a researcher, you have to go to a lot of crazy places. but you're a fly on the wall. you're not dressed up as a participant. >> but shades of gray probably pales in comparison. when they decide to get perve perverted -- >> it's not perverted to them. it's a different culture. anything that goes on in the house of soap land. >> a virtual subway car with a glass floor that you can walk away underneath is perverted. >>. >> everyone draws their line in

a different place. some draw their line of the subway car with the glass floor. >> let's see how the futures are doing on this. >> there's a glass floor and glass ceiling. you really remember that book. that scene affected you. >> thinking about you over there with your little note pad, wow, this is interesting. standard charter shares are up following a $400 million settlement. the bank is still in talk with regulators. and a deal out that we talked about earlier, carlisle is announcing it acquired a controlling stake in getty images -- >> the hot potato from one to another. >> and you searched my name and a picture of a gerbil came up.

you searched joe kernen and regular pictures came up. i searched sorkin and only aaron sorkin came up. this is visual content worth $3.4 billion. >> it's huge. it's bigger than that. >> and everybody needs these pictures. and you can look at the bottom, courtesy of getty images. >> target 11 cents above expected revenues. and staples is reporting quarterly profit of 18 cents a share. that was below estimates by 4 cents. the company blames north america and europe. just weakness in both key areas. >> let's talk europe this morning.

eu officials have committed to do "whatever it takes" to stabilize the eurozone. growth is likely to be crimped by austerity measures. let's go to new york where gillian tett is. it has looked like the eurozone is contracting but this doesn't seem to be top of mind right now. for the past couple weeks we've been floating along. nobody seems to be talk about it. i don't know if that's what mario draghi's comments two weeks ago reflect. what do you think is about to happen. >> the good news is we have moved away from heart attack mode. >> why is that? >> it's partly because draghi came out -- >> he did say -- >> he said we'll slap enough band-aid on the bleeding wound.

>> by doing nothing, just talking. >> just by talking. the fundamental issue is that, you know, he's managed to buy a bit more time. the question is what are the eurozone leaders going to do with that time. if you want to be optimistic right now, you can say, well, there is a sign of a growing consensus in the eurozone that the structure of the eurozone is going to have to change to make this project work. there's going to have to be banking union, going to have to be some kind of fiscal union. there is a growing amount of discussion on that. the fundamental problem, though, as ever is it's still very unclear how you get from a to b. people recognize a direction of travel. the path, though, is incredibly uncertain. >> we had ollie renn on yesterday. he talked about this fiscal union. walk us through the politics of what's going on in germany in terms of how you think the thinking has shifted, if it's shifted at all. >> the politics are a complete

nightmare. september the 12th is the red letter day that everybody should be watching because in germany you have the constitutional court essentially ruling on whether the kind of commitments the government has made so far are actually constitutional or not. that's something that americans of all people should understand the importance of a constitutional court actually coming out and ruling on this kind of stuff. the betting is that the constitutional court will not try and upset the project by doing anything too radical but that cannot be excluded. that has stoked up a big debate inside germany about whether germany wants to continue bailing out the others. the netherlands is putting it to a vote. you'll see growing signs of extremism across the eurozone core and the one to watch for my money is finland. everyone's been watching little greece and saying will that be the trigger that essentially

causes some kind of breakup of the eurozone. what the finns say is equally as critical. they are the conscience of the eurozone. finland went through a radical series of pain when it had its own banking crisis and that left it convinced in a very puritanical way of the value of destruction and purging a system of bad loans when you've actually had a crisis. they are appalled by what's happening in the southern fringe and the finns have been very good about speaking out about their unhappiness. watch finland for signs of whether the core country, the so-called strong countries actually going to tolerate the situation. >> is your sense the conversation has switched to greece getting out of here? >> i think there's a recognition that's a possibility and there's also a recognition that getting greece out would be very

difficult without sparking wider contagion. it would be extremely nasty if greece was to exit. yes, draghi has bought some time, that's good. the problem is that the fundamental structural issues are still unrye solved. i was talking to some people in the administration yesterday here in america and they were saying, you know, basically we're looking at a 3 to 5 year prose of trying to resolve the underlying structural issues if they can be resolved. you're looking at a very, very long period of instability with flairups. the risk of an accident remayors there all along. >> what does draghi have to do post labor day? he's talked the talk, got in a little mini honeymoon or vacation.

does he have to do anything? >> other than pray. heap has to hope the eurozone politicians carry on a path of indicating they need restructure and that implementation is crucial, fiscal union, banking union and the democratic buy-in from the voters. doing this with 17 different countries is extremely hard. frankly, draghi deserves extraordinary credit thus far for managing to keep a lid on these problems and in a world where europe can't do what the dust and basically gueriny the entire banking system and a world where they can't simply shove capital into the banks and force the banks to be recapitalized, draghi has done the third best option, which is create an implicit back stop for the system. >> gillian tett, love to see you. we will probably be talking after labor day to see exactly what draghi does.

>> thank you. >> here's what i've learned on twitter. i guess romney gave his first interview after having picked paul ryan, first single interview. >> "60 minutes." >> but one this morning on another cbs show, this morning. he's going to ask ryan to teach him the px 9. >> is it p 90 x? >> and insanity. that's the other one. >> then i saw later that google says there have been more people buying -- searches -- more searches for paul ryan shirtless than paul ryan budget. it shows you state of -- it is august. we need to get -- can you work on that? >> i'm working on that right now. >> the px 90 -- >> tony horton is who we need to

get on as a guest and by the way makes tens of millions if not hundreds of millions -- >> my brother is obsessed with this. it's in your house, you turn on the tv and you jump around with the video. i bought it but it's still in the box and it's sitting on the side of my desk. >> you type in joe kernen shirtless, the computer blows up. >> that scares me to even think about that. >> coming up, sales. we're going to go from this to talking about "fifty shades of gray." it's a business story now. 20 million copies have been sold. there's a bidding war to turn this into a movie. >> they'll turn it into an erotic film but not what you're thinking because it's not going to be rated x or even xx. >> it's the worst drought ever. can special seeds save the crop?

. >> oh, my, guys, that's a phrase they have in "fifty shades" about 500 times. how much would you pay for corn seed if in the worst drought in a half century it could at least get you this. the controversy over the high price of seed when is we come back. gravitational pull and hurtle us all into space. which would render retirement planning unnecessary. but say the sun rises on december 22nd, and you still need to retire. td ameritrade's investment consultants can help you build a plan that fits your life. we'll even throw in up to $600 when you open a new account or roll over an old 401(k). so who's in control now, mayans?

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♪ sleep train ♪ your ticket to a better night's sleep ♪ crop yeeds are being hurt by the worst drought in history. hey, jane. >> hey, joan, i'm in nevada, iowa. these leaves are green, they have dew on them. they're crumbling like parchment. but the farmer said it would be a whole lot worse if it wasn't for these supersedes. not everyone agrees. >> i'm almost afraid to open it. this is all stuff that didn't get poll nated. >> mark kenny grows corn in the best soil in america but he couldn't beat the heat. >> this is prehistoric looking

stuff. >> fortunately he also grew some corn with new drought tolerant trait, an investment that's paid off. you. >> want to put the best players on the field. seed to me is not where you cut corners. >> these seeds hang on with less water, part of a new generation of seeds that can fight pest without pesticides or send down deeper routes. such seeds have added $20 billion to farm incomes over a decade. >> there's no insecretary damage on this. >> these next generation seeds cost twice as much as conventional seeds. and not. >> is a fan. >> the price goes higher. the technology doesn't seem to be work as well as when it was first released. >> he's going back to basics. >> i believe it's safer for human consumption and animal consumption, it's accepted everywhere in the world.

>> this splar says his fastest growing corn product is conventional seed. >> some farmers feel they can control insects and weeds using methods they had used prior and that they don't need to pay the extra money per bag. >> but farmer mark kenny is skronsed without the generalically engineered seeds, he would be in a world of hurt. >> even to see what this corn went through, to see ears like this is amazing to me. >> now, mark kinney says if he didn't have these supersedes, he'd only have about half of this but casey staleos says one reason he's less interested in the 3d 00 a bag seeds is because some of these new seeds that are supposed to fight against pest and weeds naturally aren't so much any more and he's having to spend now more money to spray for them. back to you. >> i have a lot of things i could say. after seeing all those movies about "children of the corn," you're in great danger standing

there. >> i'm waiting for shoeless joe to walk by. >> just get the hell out of there. our mayor ran a documentary was the biggest documentary we ever had on cnbc. did you find drought resistant mayor ran a? >> i found the ultimate drop resistant crop. you learn a lot when you get out of the big city. apparently what grows wild along the roadside in many parts of the midwest is cannabis. they call it ditch weed. i say welcome to high-o-wa. experts tell me this will give you more of a headache than a high. >> you were painting some type of utopia where you drive along and there's marijuana everywhere. >> well, it is on the side of the -- well, what they say is for a variety of reasons you shouldn't smoke it because it is illegal. sometimes farms are grow it into

the corn. but that might make for interesting corn. >> last but not least, one of my favorite things. you said nevada. is it pronounced nevada? >> i love that. >> it like everything out here, madrid. >> right here down the street we got bogota, we have limia, ohio. i love what we do. it's so much fun. thank you, jane wells, from nevada, iowa. the nbc family of networks will bring you continuing coverage of the drought throughout the day. on cnbc we'll have a special half hour dedicated to the situation and the drought's impact today at 1:30 p.m. your eyes glaze over. any flyover state conversation, if it's not on one of the two coasts, i lose you completely. you start doing stuff. >> this whole drought thing, i'm drinking fiji water and evian. it's very difficult for me.

>> i know. >> what are those seeds you're eating? >> chia seeds. i've heard of chia pets but what do those do? >> it grows you. they're supposed to be be good for you. >> coming up, "fifty shades of gray" and the government's latest read on inflation. cpi numbers at 8:30 eastern. we'll break down the data. >> "squawk box" wants to hang out with you. join us right after the show on google plus for a special conversation with andrew and ben. add cnbc to your circles and post why are questions and comments. you can reach us on twitter. and be sure to use the hash tag squawk hangout to have your

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mobile market. starbucks and square teamed up. it's a mobile payment thing, you walk into starbucks, show them your iphone, no money changes hands. >> we're not going to have money in a few years. >> i'd still use it, though, money. >> cash. there's nothing better than cash but i do think -- >> i cop to paying for my gas with cash and people around here look at me like i have three heads. and they did make as soon as to me. they say you get miles if you use it on your card. >> and you don't have to carry big wads of cash. >> there are times at the supermarket getting one thing, a sandwich and i watch them writing a check or struggle with

the debit card. i'm like do you have anything on you? we're getting thoughts from our guest host ben mezrich. we always have a fascinating conversation about how you decide what to write. you're a great writer. part of what makes you great is you turn down 99 things out of 100 before you pick something to write about? >> even more than that. i get ten pitches a day kind of thing and it's everything you can imagine straight from the news. everything from a big story to a small story i will get a call or an e-mail about but i'm looking for that story that other people haven't really heard or gone into that's crazy, that young people doing something wild, ambition, energy. >> do you remember the last time you were here i told you about bondage and degradation and you laughed at me and said i'm not going to do a book on s&m? no, i didn't do that. did anyone come to you with that? 20 million copies.

if you told 20 million total? >> if someone had come to me and said i have a story about tying people up and whipping them, i probably wouldn't have done it. >> i want to talk about the economics of the book publishing business. >> coming up, we're just a few minutes away from breaking data on inflation. take a look at u.s. equity futures all down ahead of that number. loyee benefits while balancing the company's bottom line, their very first word was... [ to the tune of "lullaby and good night" ] ♪ af-lac ♪ aflac [ male announcer ] find out more at... [ duck ] aflac! [ male announcer ...forbusiness.com. [ yawning sound ] that's a good thing, but it doesn't cover everything. only about 80% of your part b medical expenses.

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we have cpi out. headline number unchanged. both of these metrics are lower than expected, the mere image of yesterday's ppi. year over year, we're expecting up 1.6 to 1.7, year over year at 1.4. if you look at year over year, food and energy up 2.1. both of those are a little moderate, too. empire, this isn't a july number, it's an august number, very fresh. down 5.85. so we see an easing up on the inflation front, we see a drift down on manufacturing, at least

as evidenced by the new york region. so so we're going to concentrate on that. yields, we're over 175. there was something no one counted on, it was the premise don't worry about interest rates, the world's still mired in slow growth. 175 was some people's targ the beep know you certained that. i would have to say right around 177 to 182 is resistance and the 2% level. back to you guys. >> we were talking about that earlier, rick. it's a surprising number when it goes from 1.4 to 1.7. we're talking about 1.4 to 1.7. but it's significant on a

percentage basis? >> i don't know if i'd say a percentage basis. i would almost look at it not that 1.7 is considered high but the notion that many of us, including myself, and i still think it's very possible that you could see a test of 1%. obviously it would be something most likely in europe but as europe is quiet, not necessarily better, the markets have a constant need for -- >> you were expecting a cool cpi i see in your notes. >> it turned out that way i guess. 0.10 on the headlines. >> what do you attribute rising

yields on the ten year to? >> i think europe is on vacation, it's a quiet time there. and the economic data has turned a little brighter, a good employment report and pretty solid retail sales report. >> were you ever in the qe3 camp or not? >> we see qe3 as likely. >> no one has said that. >> we're a little cooler on that call. not quite sure it will happen in september. it will likely happen in the end of the year. >> are we in a 2.25% gdp in this country now? >> our hope is that we get there in this current quarter but our forecast is we're still a little under 2% for the rest of this year. i think we've got the fiscal cliff looming over the u.s. the uncertainty in europe holding back and forcing businesses and consumers to hold back on important decisions on investment and spending. >> so some of these hotter

numbers have been a surprise to you over the last two months? >> i think the retail sales was the biggest surprise in terms of the magnitude of its increase. >> what do you attribute it to? >> i think flawed seasonal adjustments being aplayplied toe underlying data. it wasn't warrant as weak as it looked in april, may and june and probably wasn't as big of a rebound in july. but those numbers in july that we got yesterday put us well above the second quarter. >> is there any reason to not believe the fed about 2014, 2015? could that be totally wrong? >> that feds things -- >> that we're in it forever is it. >> i think we're in an environment that's consistent with the fed's view, that we're going to be in a very sluggish growth world for a very long time. >> it's only 2012. we're talking about 2015. it already got better in the last two months unexpectedly.

couldn't it get better? >> it absolutely could. there are some positives that could happen in the next year or two that could spring board the economy into a most faster growth. >> like what? >> one, let's resolve the fiscal crisis. that's first and foremost. once we do that, there's pent-up demand. if businesses are deferring spending now, they'll kick that in once that uncertainty is withdrawn. three, i think that the u.s. is on the verge, on the brink or maybe even already started a significant revolution in the energy sector that's going to transform the u.s. and world economy over the next decade. and that could add a couple percentage points to growth, at least for a very short period of time. >> all right. david, thank you. last question, have you or anyone in your immediate family read "fifty shades of gray"? >> not that i know of. i'm not sure if my wife would tell me that she did. >> you might know if she did.

>> she's in two book clubs and i don't think they've read it yet. >> there's only one way of getting the information out of her, she hiding something. >> what's that? >> well, you got to get it out of her. >> everyone that i know said you should encourage -- it's good for the family. >> that's a reflection of the people you know and the people who know you. >> i heard there's a "fifty shades of gray" baby boom coming. >> there's something going on. >> maybe that will be the long run fix of social security and medicare. there will be more population. >> there you go. >> it took dan brown 50 weeks to sell 5.2 million copies of "the da vinci code." "fifty shades of gray" beat that in four months. pliers. you know what's complicated?

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"fifty shades of gray" is making its way to the big screen. joining us now, one of ben's good friends -- both of them are joining us. we've been trying to figure out how you take a book like "fifty shades," which is pretty erotic. i have not read it.

i've been told i should be getting my wife to read it but that's a separate issue. i assume you have to try to make it an r-rated film, right? >> that's correct. the challenge is similar to adapting from any medium. we're going to treat this like adapting from ben's books or any books or adapting from a play or comic book or magazine article or anything that's not film, you get into an adaptation and we're going to bring the same criteria. when you're dealing with something that's found such incredible mainstream success, you want to preserve everything that's wonderful about it. the success of this has been breathtaking. >> the pressure on you to try to make a film that matches up to the book, and this is always a big issue about people love a book and then they watch the movie and when people read a book, they often make up their own movie in their head. how do you think about that issue? >> i think it's really -- it

comes down to finding a cinematic language to take the place of what an author is able to accomplish in prose. it's almost like a translation of everything that worked in the prose, finding something that will work visually. >> thanks for waking up early. i know you guys are in l.a. for dana at least, i've seen you at 5:00 in the morning but usually it's because we were up all night. but in terms of turning a book like "fifty shades of gray" as opposed to sort of a nonfiction work. i can speak about the facebook story because that's one we worked together on, you have different things to take into account because these are real people. is it harder essentially to do something that's true or do you think it's easier? >> yeah, it can be because of

rights issues and it's a true story so you don't have as many liberties as you would in a fiction story. so changing your books into a film, we've dealt with in the past dealing with potential life issues, be it with the characters from "bringing down the house" or people like mark zuckerberg. >> did you think facebook could be a compelling movie? first my mom's response when i was writing about facebook, she was like does anybody want to watch a movie about facebook? >> when you told me what your next book was going to be, i said it's going to be a great book but i don't know how we can make this into a film. but then you started to tell me the story and i was like this is a classic tale and it could work and translate to the screen.

>> it was talked about being a story about what you lose when you win and kind of the dna of that was in your book and it presented itself as a great theme to trade on in the film. >> go ahead. >> i was going to say, mike is one of the most amazing people in hollywood in a lot of ways. if you look him up on wikipedia, it's something anyone would be proud of. "7," "austin nights," "boogie nights," a golden global. my question is when you're working on a big studio film, i guess a ghost writer or $100 million film as opposed to a little film, which is scarier? there's different pressures i would think on each.

would you remember do a $150 million film or something tiny? >> it's interesting, when you're inside the bubble of making a movie, in terms of being a producer, the pressure to sell a good story is the same across the spectrum of budget levels. you just hope that you can deliver an experience -- especially in this environment where everything has to be an event. you really get people out of their house or as a consumer kind of choose the story you're telling. everything has to be its own version of an event, whether it's a small film or big film. the pressure is the same across the board to bring a skill set and level of story telling that compels the viewer or consumer to make you their choice. >> when i think about it, what i know about "fifty shades of grey" is the s&m stuff, which makes me think you about the plot, you got do the s&m scenes

and i remember "nine and a half weeks," and everyone had chocolate syrup all over their living rooms and can you do this in an r rated fashion so where you are don't have to make it look like porn so everyone will have to see it? >> you'll have to read the book. it's a beautiful, earnest love story. that's the engine that drives the whole enterprise. it's really about the arc of a relationship. that i think will be easy to preserve and must be preserved in any compelling film adaptation. >> i hear you are the frank whaly -- he's buddy ackerman. have you ever tried to bring him sweet and low when he actually wanted equal?

is it like that for you? >> it's exactly like that. >> honestly? >> speaking of bondage, he has cut his hair. >> paper cuts and putting salt on them. >> when i first met day andna, actually watched that movie. dana, you know, he's an intense guy, right, dana? >> frank reynolds' studio at the end of the show. >> now dana is running the show. they're also doing tom hanks movie right now. you're working on the captain phillips story. i said i want to audition as a so s somali pirate. but i want to audition for "fifty shades of grey ". >> are there actors lined up yet

in. >> no. >> so many of the shows getting green lit are sequels, are big tent projects, comic book kind of things. you guys have actually done some more intricate, interesting stories. but how hard is it to get those films made? is it frustrating to you? is it a good thing that we sort of moved towards this tempo world? >> i think it's a good thing any time large numbers of people go to the theaters. i grew up loving those movies. i was kind of raised at the movies going to see "jaws" and "close encounters" and "star wars." those movies allow our movies to get made as well. when a pseudo is happy and healthy and everyone is doing well, can you come in with riskier projects or projects that trade more on human relationships. it's just about picking your moments and catching a studio

after a good quarter with a couple of those movies in release, they're more receptive to doing things that are a little more off the beaten track. dana, mike, speaking to joe, you probably don't know this but this speaks volumes to joe -- >> you ask a question and you said tent pole and it doesn't occur to you at all. >> what's a tent pole? >> i don't know. in the context of this whole thing, you're talking tent pole. dana, mike -- >> it went over their heads, too. >> i don't think so. >> i can explain it if you have the time. >> we should also just mention that 50 shades is a universal picture owned by nbc universal, which is owned by comcast, our parent company. >> it's so innocent, though. it's endearing to me. >> i'm trying. >> you don't have to try. it is. >> coming up, we'll head down to the new york stock exchange for the latest buzz.

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. welcome back to "squawk box." i now you like to talk about target and all of these things,

but knowing you as i do, the renaissance man that you are, have you read "fifty shades of grey" or do you know anyone who has or did k you give me any personal anecdotes about it? >> you need securities analysis, and i think you need that kind of analysis. i think it's very helpful. i listen to ben, and he is the best guest. he is at the intersection of business and entertain. i have read everything you have done, i love interviewing you and you're the best guest in the world. >> thank you, i appreciate everything you do as well. i'm a huge fan of yours as well. >> i urge people to read ben's books. this business can be exciting but you need someone like ben to tell you the stories and get you in. i'm locking at a lot of stocks that people will be intrigued

because of the way ben thinks about business. it's exciting to see you. i should be more focused on google or something, but i can't focus. >> you didn't answer if you read it or not. >> no, i have not read it. you know how much i love football and that's the place for me right now. >> would you ever read it? i haven't either. or seal movie? >> quite frankly i'm so far beyond it at that point, i don't know. >> they can't teach you diddley. it's a universal movie, so we all promised to see the movie. >> at the end of august, this is what we have to be focused on. we can talk about how staples, secular decline, or talk about

what everybody else is talking about or we can go to the beach. >> i said that, it is the dog days, it is what it is, jim, thank you. >> the winklevoss' i they go to the club i go to or something. >> also, p 90 x. >> if i were in congress, from wisconsin, i would be doing that. >> i'm going to do p 90 x and then read "fifty shades of grey" so i'm ready. >> coming up, more we ben. >> tomorrow on "squawk box" we'll talk tech with the ceo of business insider. we'll start with the ceo of dunkin' donuts, and employment

and real estate, weekly jobless claims hit the tape at 8:30 eastern. yees. [ duck yelling ] [ male announcer ] find out more at... [ duck ] aflac! [ male announcer ] ...forbusiness.com. ♪ ha ha!

in absolute perfect physical condition and i had a heart attack right out of the clear blue... i'm on an aspirin regimen... and i take bayer chewables. [ male announcer ] be sure to talk to your doctor before you begin an aspirin regimen. he's my success story. [ laughs ]

♪ >> deere is the stock of the day and it closed at $80.30 yesterday. it earned a $1.9 8 for it's third quarter, that was 33 cents shy of estimates. weakness international sales hurt, and caterpillar is down. they're not identical in the markets they serve, but it's under pressure after those results from deere. let's get final thoughts from ben. that is business news is what you make of it. when people said, and i remember when i heard up for best picture, and i had not seen it, and i'm not on facebook, and now i have seen it three or four times now. if i see that it's on, i'll watch it. i think it's partly because of

jesse eisenberg. >> during the olympics they saw jesse eisenberg in the audience and they called him mark zuckerberg. that intersection of business and entertainment is my beat and that facebook story was that. it was a once in a lifetime kind of story. so i was lucky to be on the ground floor of that. >> are you working on something? >> sex on the moon is out in paper back, but i'm working on one for next summer about college kids that launched the only poker room, and they built an empire in a way, and now they're being persecuted and in hiding because they did something, that to me, was very american. it's an intersection of 21 and the social network. >>